MUMBAI: Country's third largest private sector lender Axis Bank today entered into an agreement to acquire payments wallet FreeCharge for Rs 385 crore in an all-cash deal.
"The bank has today entered into a share purchase agreement with Jasper Infotech Private Limited (Snapdeal), to acquire 100 per cent equity capital of Accelyst Solutions and Freecharge Payment Technologies (Accelyst and FPTPL collectively referred to as FreeCharge), subject to receipt of requisite regulatory approvals, including from the RBI, for a cash consideration of Rs 385 crore," it said in a regulatory filing.
The bank's managing director and chief executive, Shikha Sharma, told reporters that the agreement was signed earlier in the day and the deal is important from a strategic perspective for the bank.
Axis Bank's chief financial officer Jairam Sridharan said the acquisition will double the customer base of the bank and leapfrog its digital journey by multiple years.
He said the bank expects regulatory clearances to the deal in two months. Following this, the bank could consider merging their wallet businesses.
FreeCharge presently has a revenue of about Rs 80 crore, he added.
Snapdeal had bought FreeCharge in April 2015 for an estimated USD 400 million or over Rs 2,500 crore at current rates. At that time, this was touted as the largest deal in the nascent start-up ecosystem in India.
Earlier, FreeCharge was reported to be holding discussions with Paytm (One97 Communications).
However, the deal did not go through as the Alibaba-backed company was offering a much lesser price of about USD 15 million, one of sources said.
Acquiring FreeCharge's business would give Axis Bank access to about 52 million mobile wallet holders of FreeCharge as well as about 150 to 200 professionals.